Caracas, Venezuela – In a new development reflecting the depth of its economic and political crisis, Venezuela announced a reduction in its oil production in recent days. This comes amid escalating US sanctions and tightened export restrictions, leading to a near-complete paralysis of crude oil shipments to global markets.
According to energy sector sources, the Venezuelan state oil company, PDVSA, was forced to reduce daily production. This followed disruptions to maritime transport operations and difficulties in obtaining necessary insurance for tankers, as well as the withdrawal of several international shipping companies fearing direct US sanctions.
This reduction comes at a time when Venezuela relies almost entirely on oil revenues as its primary source of hard currency. This exacerbates internal economic pressures and intensifies the cost-of-living crisis faced by its citizens. This occurs amidst a decline in the ability to import basic goods and food.
Reports indicate that the recent US sanctions have not only targeted oil sales but have also extended to supply chains, spare parts, and technical services. This has led to the shutdown of several oil fields or their operation at reduced capacity, amidst increasing technical and logistical difficulties.
In response, the Venezuelan government is attempting to find alternative markets and unconventional export methods. This involves using intermediaries or limited shipments. However, these solutions remain costly and have a limited impact, failing to compensate for the significant losses resulting from the decline in official exports.
Analysts believe that continued production cuts could have long-term repercussions for Venezuela’s energy sector, which is already suffering from declining investment and deteriorating infrastructure. They warn that the current crisis could push the country to unprecedented levels of production decline if the embargo continues without a clear political solution in sight.
